First, congratulations to Africa Eats on its listing on the Mauritius Stock Exchange.
Since last year, my co-founder and I have been researching the best model for our book publishing and AI fund underway. We are exploring the choice between a venture capital company and a Permanent Capital Vehicle (PCV), but we are leaning towards the latter.
Earlier this year, I read about Africa Eats and its co-founder, ‘Luni’? Libes. It’s a Permanent Capital Vehicle, much like Warren Buffet’s Berkshire Hathaway. It’s a holding company with a diverse portfolio of African food and agriculture businesses.
The founding of Africa Eats traces back to the creation of the Fledge Series before COVID-19. Fledge was a business accelerator that invested in various African agriculture startups. In parallel with its founding, these startups proved profitable, and Fledge worked on ensuring liquidity for investors.
However, unlike typical venture funds that seek exits within 5 to 10 years, African startups often require longer growth timelines due to market conditions. That doesn’t mean they aren’t successful—it just means they need patient capital.
Luni and his team recognized this challenge and explored a solution: the potential use of public markets for liquidity.
In collaboration with the Stock Exchange of Mauritius (SEM), they launched SEMX in 2024, a new segment for high-growth SMEs. Fledge Series converted to Africa Eats and then went public through this platform.
In my view, the Permanent Capital Vehicle is the best way to grow African-owned startups because they need time:
- Most exits in the West involve tech or tech-adjacent businesses, where time is crucial for scaling and exits.
- However, Africa still requires significant infrastructure development and businesses with a physical component, which naturally take longer to build.
- Just because these businesses take time to grow does not mean they are not succeeding.
However, easy liquidity is essential—whether through a public listing of the fund or private PCV periodic buybacks or sales.
Definition of a Permanent Capital Vehicle (PCV):
PCVs are investment structures designed to operate indefinitely, allowing investors to subscribe and redeem capital over time. They provide a continuous source of capital for investment managers without a fixed fund life or exit timeline.
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E&OA.
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This post is not about what governments should do – but rather a conversation of information among African entrepreneurs.
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Our fund aims to raise $2 million in its first round to acquire and develop 1000 film-adaptable African books, build AI-powered publishing tools, and scale high-value intellectual property into books, film, games, and merchandise..